Andrikopoulos v. Broadmoor Management Co., Inc., 81CA0252

• Citation: 670 P.2d 435
• Decision Date: 30 June 1983
• Docket Number: No. 81CA0252,81CA0252
• Parties: A.G. ANDRIKOPOULOS, Dan Unger, William Prewett, Harry Simmons, Jr., Paul Conner, Robert Cohen and Paul Runge, individually; and Riva Ridge North Chalets Condominium Association, a Colorado non-profit corporation, Plaintiffs-Appellees, and Meryle L. Cohen and Elda Unger, individually, Additional Plaintiffs-Appellees, v. The BROADMOOR MANAGEMENT COMPANY, INC., a Colorado corporation, and Ross E. Davis, individually, Defendants-Appellants. LODGE MANAGEMENT CORPORATION, a Colorado corporation, Defendant and Counterclaim Plaintiff-Appellant, v. Franklin D. CRAWFORD, W.B. Wiggins and Eunice H. Smith, Counterclaim Defendants-Appellees. . I
• Court: Colorado Court of Appeals

Page 435

670 P.2d 435

A.G. ANDRIKOPOULOS, Dan Unger, William Prewett, Harry

Simmons, Jr., Paul Conner, Robert Cohen and Paul Runge,

individually; and Riva Ridge North Chalets Condominium

Association, a Colorado non-profit corporation, Plaintiffs-Appellees, and Meryle L. Cohen and Elda Unger, individually, Additional Plaintiffs-Appellees, v. The BROADMOOR MANAGEMENT COMPANY, INC., a Colorado

corporation, and Ross E. Davis, individually,

Defendants-Appellants.

LODGE MANAGEMENT CORPORATION, a Colorado corporation, Defendant and Counterclaim Plaintiff-Appellant, v. Franklin D. CRAWFORD, W.B. Wiggins and Eunice H. Smith, Counterclaim Defendants-Appellees.

No. 81CA0252.

Colorado Court of Appeals,

Div. I.

June 30, 1983.

As Modified on Denial of Rehearing

Aug. 4, 1983.

Constantine & Prochnow, P.C., Neil E. Lipson, Thomas J. Constantine, Englewood, for plaintiffs-appellees.

Roath & Brega, P.C., Charles F. Brega, Robert C. Kaufman, Denver, for defendants-appellants and counterclaim plaintiff-appellant.

No appearance for counterclaim defendants-appellees.

BERMAN, Judge.

Defendants appeal a judgment which awarded the Riva Ridge North Chalets Condominium Association (Association) damages which compensated it for overcharges made by defendants for management of the Association members' condominiums over approximately a ten-year period. We affirm.

The Lodge at Vail complex currently is composed of five buildings, one of which is named "Riva Ridge North Chalets" (RRN). The RRN building contains ten units of a total of over 200 in the entire complex. The buildings are jointly managed, but each building has a separate contract with the management company.

In 1968, Ross Davis and Walter Stalder purchased the Lodge at Vail from Vail Associates. In effect, this contract gave Davis and Stalder title to only one building, the hotel, and to all outstanding shares of the company which managed the remainder of the individually owned units. This contract was signed by Davis and Stalder as individuals. Its terms obligated Davis and Stalder to assume the obligations set out in an earlier "management agreement" with the Association. Shortly after the agreement was executed, Davis' and Stalder's ownership interest was transferred to Lodge Properties, Inc., and, as "joint venturers" in the Lodge Investment Company, they entered into a contract with the Broadmoor Management Company, Inc., which transferred all management and rental functions to the Broadmoor. Lodge Investment Company was subsequently incorporated under the name Riva Ridge Chalets Management Corporation (Corporation), and then, later, as Lodge Management Corporation (LMC).

The Association, which is a Colorado non-profit corporation, and the individual owners of RRN units signed a management agreement with the Corporation in 1969. In return for management and rental agent responsibilities, the Corporation was to receive for each unit $30 per month, 40% of all rental commissions, and, for promotional purposes, three days' use of the unit and an amount equal to one day's rental during the prime season. Ross Davis signed the contract on behalf of the Corporation.

From 1969 until the date of judgment by the trial court, the Corporation, and later, LMC, charged the Association for all common expenses, including resort association dues, housekeeping and security services, and advertising, based on an apportionment of the total square footage of all units in the entire complex. In 1979, the Association and a number of individual owners (plaintiffs) brought suit against LMC, Davis, and the Broadmoor claiming that the charges were improper. Stalder was not named as a defendant. The plaintiffs contended that the common expenses were to be paid out of the monthly fee, the 40% rental commissions and the charge equivalent to one day's rent during the prime season.

The defendants counterclaimed, praying for, inter alia, a "declaration of the rights, duties and obligations of Lodge, the Association, [and] the individual plaintiffs...." and for any unpaid 40% rental fees. The defendants also moved for dismissal based on the plaintiffs' failure to join the three other current owners of units in RRN, all former owners of the units, and those holding units in joint tenancy with plaintiffs. The parties stipulated to the joinder of all joint tenants, and the trial court entered a rule and order whereby they were made parties. The three other current owners were joined by defendants as counterclaim defendants.

At trial, the plaintiffs' accountant was qualified as an expert in accounting procedures, and was allowed to testify as to the amount of the overcharges over the length of the contract. The trial court, after examining the documents and hearing the accountant's testimony, concluded that the accountant's calculation of overcharges was correct. The court awarded damages in that amount to the Association, plus prejudgment interest, against LMC, Davis, and the Broadmoor, jointly. The Association was ordered to distribute the award "among the individual unit owners proportionate to their percentage ownership in the Riva Ridge North Condominium Building."

I.

Defendants first contend on appeal that the trial court erroneously interpreted the management and rental agreement entered into between the Association and the Corporation in 1969. We disagree.

Defendants maintain that the trial court erred in charging to defendants two groups of expenses: (A) those which it found were chargeable entirely to the Corporation, and (B) overcharges due to improper calculation of the Association's expenses.

A.

The trial court found that certain management expenses, including the expense of operating the hotel building, were not chargeable directly to the owners, but should have been absorbed through part of the 40% rental income defendants receive from each member of the Association. This finding was based on its interpretation of ambiguous provisions of the management and rental contract, and we do not find the trial court's interpretation to be unreasonable. Moreover, testimony by members of the Association as to their understanding of those ambiguous provisions provided further support for the trial court's conclusions.

B.

Since 1969, LMC had charged certain expenses to each unit based on its percentage of the total square footage in the complex. The trial court found that LMC should not have pooled these expenses among all the units. Rather, it found that the Association should have been charged only the actual cost of providing such services to RRN because no provision was made for pooling in the management contract.

We have reviewed the management contract and also find the provisions regarding calculation of expenses to be ambiguous. And, since there is support in the record for the factual findings of the trial court as to the meaning of those provisions as intended by the parties, we will not disturb those findings on appeal. Linley v. Hansen, 173 Colo. 239, 477 P.2d 453 (1970); see also Palipchak v. Kent Construction Co., 38 Colo.App. 146, 554 P.2d 718 (1976).

II.

The defendants also contend that the trial court erred in finding that the Association could represent the owners in this law suit. We disagree.

Where a condominium association is a signatory to a contract, it is a proper party to a suit for damages based on that contract. Ireland v. Wynkoop, 36 Colo.App. 205, 539 P.2d 1349 (1975). Moreover, here, the Association had been granted the power through the Association by-laws to maintain a bank account for the owners and to collect and disburse all funds necessary for the management of the RRN building. Each owner was required to be a member of the Association. Thus, the Association was in an ideal position to represent all of the owners and to disburse the award among them.

Defendants contend that Summerhouse Condominium Association, Inc. v. Majestic Savings & Loan Ass'n, 44 Colo.App. 495, 615 P.2d 71 (1980) would require each individual owner to be a party to this suit and would preclude the Association from representing the owners in a breach of contract suit. However, Summerhouse is readily distinguishable from the case at bar. First, in Summerhouse, the Association was not a party to the contract. And, in that case, the suit was brought for breaches of individual purchase and sale contracts which did not directly affect any interests of the Association itself. Here, a breach of a management contract resulted in a direct depletion of Association funds.

III.

Defendants next contend that the trial court erred by relying exclusively on the testimony of the plaintiffs' expert witness to interpret the management and rental agreement. We find this argument to be based on a mischaracterization of the evidence.

First, plaintiffs' expert, a certified public accountant (CPA), was properly qualified as an expert in accounting. The record reveals that he testified only regarding his professional opinions as a CPA "which have to be made by him in the performance of his duties ...." A trial court has discretion in determining the qualifications of an expert and the admissibility of expert evidence. Stark...